AboutEric Forster Expertise Did your last mortgage broker or lender trick you into a messy situation which could cost you your home? I've been close to 30 years in the mortgage industry, and I've seen it all. Believe me, it is not pretty.
As the owner of a mortgage company I am called frequently to testify as an expert witness in mortgage fraud cases and other cases where lenders did not fully disclose the terms of the loans they were offering to the borrowers. I have seen fraud being committed by borrowers - and by lenders. It's a tough world out there.
Experience More than 25 years in loan production and underwriting in Southern California.
Organizations Mortgage Bankers of America (Southern California Chapter)
Publications Former columnist for AOL Financial Center and the author of a mortgage primer.
Question I am considering becoming a first time home buyer within a years time.I live in Houston, Texas. I am a flight attendant and will make about 37-38k+ this year. I just recieved a $5.00/hr raise this December which raises my income by about $5,000/per year.Last year with my per diem, I made about 31k+. I applied for a loan last year and was offered a 19% loan. Of course I did not accept this. My credit score is 725, I have not been late on any payments since 1998 when I was changing careers and had late payments on some credit cards. I was told that my debt to income ratio is the reason why I was offered this ridiculous rate. The loan officer would not count my per diem which easily equals about $5,000/per year or more. He said he could not count this into my yearly income since it was per diem. However, I recieve per diem every time I fly and it is paid every month as part of my salary and virtually untaxed. I have $13k of debt to include 2 credit cards and my car loan. Do you think that I should be able to qualify for a decent home loan? I do not have any savings. I was off for 4 months with a wrist fracture and used all of emergency fund. Any hope for me or should I pay off all of my debt before even trying to apply again? I pay $600.00 per month in rent plus bills. Would it be best to owner finance or lease to own instead of trying for a conventional loan? Please advise.
Answer Dear Rosemary,
Some lenders will count your per diem as part of your income (try Bank of America's or Wells Fargo's First Time Homebuyer programs). Most will not.
Based on the numbers you've provided, you should be able to qualify for a loan of $100,000 - $115,000. In my part of the country (Los Angeles), where the lowest priced condos start at $300,000, that wouldn't get you much; but it could be a different story in Houston.
As to your last question: Owner's financing and lease-to-own have always been a viable alternative to bank financing, and should be used when bank loans are not available.
About Real Estate Home Mortgages
This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here
